Indonesia is wary of the possibility of a food crisis in 2023. According to Law no.

18/2012 concerning
Food, food crisis is a condition of food scarcity experienced by most people in an area caused by
difficulties in food distribution, the impact of climate change, natural and environmental disasters, and
social conflict, including the result of war. The World Food Program (WFP) recorded a record 349 million
people in 79 countries facing a food crisis in 2022, an increase from 287 million in 2021 and 200 million
in the pre-Covid-19 pandemic. More than 900,000 people around the world are struggling to survive in
conditions of hunger. This figure is ten times higher than five years ago. WFP said the combination of
conflict factors, economic shocks, climate extremes and soaring fertilizer prices will create food crises of
even greater proportions in the coming years.

The Russian military invasion of Ukraine since February 24 2022 last year has had an impact on
production, consumption, trade patterns and high food commodity prices, thus threatening global food
security. Ukraine is the world's tenth largest wheat producer in 2022 with a production of 433 million
tonnes. Ukraine exports an average of four million tons of grain (wheat, corn and barley) per month.
Shipments of wheat and grain have been halted for months due to Russia's blockade of Ukrainian ports.
The war had short and long term implications for Ukraine's ability to produce and export food
commodities. The war prevented farmers from working in the fields, while military conscription and
population exodus reduced the agricultural workforce. This situation is exacerbated by limited access to
supplies of essential production inputs such as fertilizers. War also has some indirect and cascading
consequences. First, fertilizer prices hit record highs, resulting in reduced fertilizer use and reduced crop
yields. Second, many countries implement export restrictions, thus pushing up food commodity prices
on the international market. Third, there was panic buying of food commodities at the individual,
industry and country levels.

As a country whose staple food is rice, Indonesia does not need to worry about the rice commodity
crisis. BPS recorded the trend of Indonesia's rice production increasing by 31.31 million tons (2019), 31.5
million tons (2020), and 31.36 million tons (2021). With a population of 275 million people and rice
consumption of 97.36 kg/capita/year, the total need for rice for household consumption in Indonesia
reaches 26.774 million tonnes annually. If added to consumption outside the household of 17.24
kg/capita/year, Indonesia's total rice demand would reach 31.515 million tonnes/year. The Ministry of
Agriculture (2021) noted that the SSR (Self Sufficiency Ratio) value for rice had reached 99.4%, meaning
that 99.4% of the need for rice could be met by domestic production. For this achievement, Indonesia
received an award from the International Rice Research Institute (IRRI) which was handed over by the
Director General of IRRI Jean Balie to Indonesian President Joko Widodo on 14 August 2022.

Indonesia needs to be aware of the wheat commodity crisis. Based on USDA data (USA), since the
2016/2017 period, Indonesia's wheat consumption has soared to 10 million tons. Indonesia's wheat
consumption in the 2021/2022 period is estimated at 10.4 million tons, up from 10.1 million tons in the
2020/2021 period. In fact, the amount of Indonesian wheat imports in the 2012-2015 period was only
6.25-7.43 million tonnes each year. The Indonesian population currently consumes 37 kg of wheat per
capita per year, equivalent to 38 percent of rice consumption. Consumption of wheat increased 146
percent compared to consumption in 2014 of 15 kg per capita per year. With consumption growth
reaching 18% per year, at the commemoration of Indonesia Gold in 2045 it is estimated that wheat
consumption can match rice consumption.

Wheat is a food commodity that is one hundred percent imported. BPS noted that Indonesia's wheat
imports have increased by 10-11 million tons every year since 2016 until now. Australia and Canada are
the two largest wheat exporting countries to Indonesia from 2012 to 2020, with 29.24 million tonnes
and 15.48 million tonnes respectively. The combined wheat imports from the two countries contributed
up to 54.28 percent of the wheat imported by Indonesia during these nine years. Ukraine and Russia are
the third and sixth largest wheat exporting countries to Indonesia in the same period, with a cumulative
weight of 14.16 million tons and 3.82 million tons, respectively. The combined weight of wheat imports
from the two countries accounted for 22.22 percent of wheat imports that entered Indonesia during this
period. The conflict between Ukraine and Russia had forced Ukraine to close its wheat export tap. As a
result of this incident, Indonesia diverted wheat imports from Australia and Argentina. In January-July
2022 Indonesia imported 2.06 million tonnes of wheat from Australia and 1.47 million tonnes from
Argentina. These two countries accounted for 64.1% of Indonesia's total wheat imports in that period.
Indonesia also imported 694 thousand tons of wheat from Canada, 594 thousand tons from Brazil and
545 thousand tons from India, while only 5,509 tons from Ukraine.

The increase in the volume of imported wheat was influenced by factors such as income, population,
wheat prices, exchange rates, and the development of wheat-based industries (Pradeksa et al., 2016). An
increase in national income of 1% causes the volume of wheat imports to increase by 0.253%, because
people have more purchasing power for wheat products. A 1% increase in population causes the volume
of wheat imports to increase by 3.025%. If international wheat prices increase by 1%, the volume of
imported wheat will also increase by 0.491%. The results of this analysis are inconsistent with the theory
that an increase in international wheat prices will reduce the volume of Indonesian wheat imports. The
domestic rice price variable has no significant effect on the volume of Indonesian wheat imports,
because wheat-based foods already have their own place in people's consumption patterns. Before the
Ukrainian and Russian conflicts erupted, the price of wheat flour was in the range of Rp. 8,500 – Rp.
9,000, cheaper than the price of medium rice, which was Rp. 10,400.

The increase in wheat imports was driven by changes in the consumption patterns of the upper-middle
class towards consumption of wheat-based products such as bread, biscuits, pizza, pasta, cookies and
snacks, while the lower-middle class consume instant noodles which are cheap and easy to cook. Based
on data from the World Instant Noodles Association (WINA) as of May 13 2022, consumption of instant
noodles in Indonesia is 13.27 billion servings in 2021. This number is up 5.05% compared to 12.64 billion
servings in the previous year. Indonesia's position is right below China/Hong Kong with instant noodle
consumption of 43.99 billion servings. BPS noted that per capita consumption of instant noodles in
Indonesia was 3.96 packs measuring ±80 grams per month in 2021. That number was up 9.09%
compared to the previous year which was 3.63 packs per month.